123 Main Street, LLC – Your Rental Address is Not a Smart LLC Name

By June 7, 2019 July 22nd, 2019 Blog
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Robertson & Gable, LLC has many real estate investors that call in to structure an LLC around a piece of property that they own, or will be closing on in the near future. Smart. Most of these LLCs are Single Member LLCs where the property owner is the only owner. If this is their first foray into real estate investing, that is ok. However, if we discover that they own multiple properties we offer advice on how to set up a more complex structure that enables more protection and less work and associated costs at tax time.

Why your rental address is not a smart LLC name

Many times the Single Member LLC order will obviously have the address of the rental property. Not smart. The main reason an investor puts their rental property into an LLC is to offer protection against them personally. Tenants can many times be problematic. Here is the question you should ask yourself: Do you want to make it easy for the disgruntled tenant to find your LLC and make it easy for them to sue you? No! Using your rental address as your LLC name is not a smart move.

Why structuring your rental agreement/lease under your new LLC is not smart

So now you are smart and named your new LLC something other than the street address. Make sure to never structure your lease under your name personally. It’s also best to not structure the lease under the new LLC name but you may not have another good alternative. Structuring your lease under a totally different LLC would be best, or if you have hired a property management company, they would be on the lease.

One last tip for the multiple property owner; don’t use the same “base name” for all of your LLCs. In other words, if you have multiple properties, don’t name them all so similar that if someone discovers one, they will find all of your holdings! For example, don’t use CBC Investment One, LLC, CBC Investment Two, LLC, etc. etc.

The law firm of Robertson & Gable, LLC has been helping Georgia businesses since 1984 and specializing in forming Georgia corporations and LLCs since 1994. We have set up more than 60,000 Georgia businesses over the last 20+ years. Let us help incorporate yours.